Reference no: EM131284196
The government of Optima, a small developing country which cannot affect world prices, wishes to achieve self sufficiency in food so that domestic production is enough to cover caloric needs. At present, food is imported while Coffee is exported. If self sufficiency involves producing at least X units of food at home where X is more than the current production levels. The Finance Minister proposes attaining self sufficiency by putting a tariff on imports of food and raising the tariff until the country is self sufficient. The Minister for Agriculture suggests a subsidy to the production of food. He argues that this would not hurt consumers and so is the best way for production to be raised and the least cost way of attaining self sufficiency as defined above.
(a)
(i) Draw the demand and supply of food as a function of the domestic price of food keeping the price of coffee fixed, the imports of food and label the point X.
(ii) The equilibrium with the Finance minister's proposal.
(iii) The equilibrium with the Agriculture minister's proposal.
(b) Assuming that welfare is the sum of consumer surplus, producer surplus and net government revenue what is the change in welfare
(i) For the Finance Minister's proposal being implemented.
(ii) The Agriculture Minister's proposal being implemented.
(iii) What is your recommendation to the government?
(c) How is your answer related to the principle of targeting?
(d) If it was very costly to raise revenue, how would your answer be affected?
(e) Suppose the target was to import no more than DF . What would the optimal policy be? Explain the intuition behind your answer.
Explains why colored men fought for america, 1919
: Explains Why Colored Men Fought For America, 1919.
|
Develop an opening for a presentation
: First, plan your presentation by describing your purpose; second, perform an audience analysis by identifying the demographics, the knowledge level, and the psychological needs of a potential audience; third, prepare two effective openings for you..
|
Marketing goals and objectives for your marketing plan
: Write a 3-5 page paper/analysis on your chosen case study where you consider the SWOT Analysis, Marketing Goals and Objectives for your Marketing Plan.
|
Explain three dimensions that provide different perspectives
: In the automobile industry, how does "lean production" differ from the traditional assembly line approach?- "A matrix structure integrates four competencies on a worldwide scale." Explain.
|
Function of the domestic price of food keeping
: (i) Draw the demand and supply of food as a function of the domestic price of food keeping the price of coffee fixed, the imports of food and label the point X. (ii) The equilibrium with the Finance minister's proposal.
|
What do you think is this person''s attitude toward you
: If you had the opportunity to prepare and deliver this message again, what would you do differently to improve your presentation?
|
Why we don''t always recognize great art/artists
: WHY WE DON'T ALWAYS RECOGNIZE GREAT ART/ARTISTS.The question is why, why is genius often overlooked?
|
Opened a dry cleaning service
: Prepare journal entries (in good form) for the following transactions. If no entry is required, write “no entry.” Apr. 1 Investors opened a dry cleaning service, called Same Day Cleaners, by depositing $60,000 into a business bank account and receivi..
|
Large food-processing plant
: Sam is one of many potato growers who sell potatoes to a large food-processing plant. It is safe to assume that potatoes are sold in perfectly competitive markets.
|